GR 142896; (September 2007) (Digest)
G.R. No. 142896 September 12, 2007
CANELAND SUGAR CORPORATION, petitioner, vs. HON. REYNALDO M. ALON, LAND BANK OF THE PHILIPPINES, and ERIC B. DE VERA, respondents.
FACTS
Caneland Sugar Corporation filed a complaint with the Regional Trial Court (RTC) for damages, injunction, and nullity of mortgage against Land Bank of the Philippines and Sheriff Eric B. de Vera. It sought to enjoin the extrajudicial foreclosure sale of its mortgaged property. The RTC initially held the auction in abeyance but later authorized its proceeding, citing Presidential Decree No. 385, which mandates government financial institutions to foreclose when arrearages reach at least 20% of the obligation and prohibits courts from issuing injunctions against such actions.
Petitioner’s motion for reconsideration was denied. It then elevated the case via a Petition for Certiorari to the Court of Appeals, which dismissed the petition, finding no grave abuse of discretion by the RTC. Petitioner filed the present Petition for Review, arguing that the RTC’s authorization of the foreclosure constituted prejudgment and that P.D. No. 385 was inapplicable as Land Bank had allegedly taken over its operations.
ISSUE
Whether the Court of Appeals erred in finding that the RTC did not commit grave abuse of discretion in refusing to enjoin the extrajudicial foreclosure.
RULING
The Supreme Court denied the petition. The core issue was rendered moot and academic because the act sought to be enjoined—the foreclosure sale—had already been consummated, as evidenced by a Certificate of Sale issued to Land Bank. An injunction will not lie against a fait accompli. Consequently, there was no longer an actual controversy regarding the propriety of the injunctive relief.
Nevertheless, the Court resolved the merits for future guidance, as the issue is capable of repetition yet evading review. The Court held that the RTC correctly applied P.D. No. 385, which imposes a mandatory duty to foreclose and bars injunctive relief. The RTC’s order was based solely on this law and did not constitute a prejudgment on the validity of the mortgage, which remains to be litigated in the main case. Petitioner’s vague denials regarding the loan coverage were deemed negative pregnants, implying admission of the substantial facts. Its claim of bank takeover was an issue for trial, not a basis to preempt P.D. No. 385. The denial of provisional injunctive relief did not preclude a full trial on the principal action for nullity and damages.